News at Smith

Four Ways Innovation Has Changed

Aug 31, 2016
World Class Faculty & Research


SMITH BRAIN TRUST — Borrowing a newspaper from a neighbor might have been the extent of social media as recently as 20 years ago, says professor Anil K. Gupta at the University of Maryland’s Robert H. Smith School of Business. But today, a proliferation of consumer and business-connecting apps, from Facebook to Periscope and Snapchat, represents a digital age contributing to “360-degree innovation” — one of four concepts shaping big ideas at Google and other organizations in 2016. Gupta recently laid out a four-part model via a podcast, “Innovation 360 degrees: Then & Now,” hosted by India-based K-Start, a seed program seeking “to empower disruptive, next generation startups.” Here are highlights:

1. 360-degree innovation: Today’s technology pace “is geometric, which means in any 10-year frame, the pace of innovation is far greater, now, than in any 10-year time frame — even two decades back,” Gupta says. “The Internet means companies operate in a fishbowl environment.” Such massive transparency means products, services and internal operations are increasingly visible to customers, suppliers and partners — and it’s faster and easier for competitors to copy business models. This, compounded by the evolution of technology, “dramatically reduces the half-life of business models, technologies, products, services,” he says. Thus, “companies need to become innovation machines at a much faster pace than ever.” Alphabet via Google exemplifies this, with its innovation expanding its core search functions to “vertical” and “micro” searching, driving concepts from Android and Google Wallet to robotics or driverless cars and life sciences applications.  

2. Distributed innovation by geography: “The 1980s brought the globalization of manufacturing and the 1990s brought the globalization of white collar work and business to places like India,” Gupta says. “But now we’re seeing the globalization of R&D.” For example, General Electric operates an R&D center in New York, but in terms of the total of working scientists and engineers, its largest R&D center is Bangalore, he says. “And the center is doing research for GE globally, not just for GE India.”

3. Distributed innovation by collaboration: “Apple is a perfect example” of desegregating value chains by executing R&D through and with other countries, which can effectively speed innovation and the half-life of products, Gupta says. For example, cloud-based, crowdsourced software development allows for Apple to produce less than one percent of the thousands of apps that its iPhone consumers can use. 

4. Frugal innovation: Consumers in emerging markets, about 80 percent of the world’s population, now demand innovation, but through low-cost products, Gupta says. This phase is similar to that which today’s advanced economies went through in their own earlier stage of development. But there’s a key difference: Environmental consciousness is greater today. This adds a dimension to frugal innovation: To do “better” as well as “good” with less. Tata Motors with its compact Tata Nano model exemplifies this, Gupta says. An example of frugal innovation in the healthcare industry, he adds, is GE’s Mac 400 ECG system for heart monitoring, which is available in markets like India’s for a fraction of the cost of similar diagnostic equipment in developed markets.




About the University of Maryland's Robert H. Smith School of Business

The Robert H. Smith School of Business is an internationally recognized leader in management education and research. One of 12 colleges and schools at the University of Maryland, College Park, the Smith School offers undergraduate, full-time and part-time MBA, executive MBA, online MBA, specialty master's, PhD and executive education programs, as well as outreach services to the corporate community. The school offers its degree, custom and certification programs in learning locations in North America and Asia.

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